Information Technology
What is Information Technology ?
The technology involving the development, maintenance, and use of computer systems, retrieving, transmitting and manipulating data and information is called Information Technology.
IT is the collection of individual technology components that are typically organized into CBIS(Computer Based Information System).
IT in Business Environment:
Business environment refers to combination of social, legal, economical, physical and political factors that affects the business activities.
Organizations must react to the problems and opportunities arising from the modern business environment. For that Information Technology is the only solution.
The list of business pressures in modern business organizations are listed as:
1. Global competition for trade and labor:
In a global economy, trade is less constrained by traditional barriers like borders, language, currency and politics etc. Advanced telecommunication network and Internet have facilitated the Globalization and creation of Global Economy.
- Cost of labor differ from one country to other. For example: Hourly industrial wage rate is more than 15$ in some western developed countries whereas it is only $1 to $2 in many developing countries.
- In addition companies in developed countries pay high costs and benefits. Therefore they have difficulties competing in labor-intensive industries with developing countries. As a result companies are moving their manufacture facilities to countries with low labor costs.
Such global strategy requires extensive communications, several cultural, ethical and legal conditions.
Rapid and inexpensive communication and transportation modes increases the magnitude of international trade even further.
2. Need for real time operation:
- Real time operation is the ability of organization to respond instantaneously to any business data and information for decision making.
- So high performance telecommunication and IT is needed.
3. Changing Workforce:
Workforce refers to the people engaged in or available for works, jobs, either in a country or an area or in a particular company.
- Participation of females, single parents, minorities and physically challenged persons in different works.
- Changing workforce can affect the organization's competence and profit from the production.
4. Customer orientation:
- Growth of knowledge in customers about availability and quality of products and services.
- Customers are comparing the products or services and demanding more detailed information about the products or services. So Customer Orientation is a must.
- Increase in customer sophistication and expectations.
- Advance in use of Internet and E-commerce bring customer information about products and services provided by the organization.
5. Technological Innovation and Obsolescence:
- Technological Innovation refers to increase in the quality and standard of the products and services which is causing obsolescence of the old products and services.
6. Information Overload:
- Information Overload is increasing day by day in an organization due to the use of the internet and other telecommunication networks.
- Information generated and stored in organization is increasing explonentially
- So accessing, navigating and managing the information for managerial decision making is critical.
7. Social Responsibilities:
- Social issues affecting organization ranges from state of physical environment to non discriminatory employment practices
- organizations are feeling pressure of social issues as public are becoming more aware of social problems.
8. Ethical issues:
Ethics in a business context refers to the standard and values for judging whether the particular conduct or act in work place is right or wrong.
- Ethical issues is important because it can damage image of the organization and confidence and morale of the employee.
- What is ethical to one person may not seem so to other and what is ethical in one country may not seem so to other country.
- Use of IT is raising many ethical issues ranging from surveillance of E-mail to invasion of privacy of millions of customers.
Organizational response to pressures:
Many of the organizational responses are enhanced or facilitated by IT:
1. Strategic System:
- Systems that help the organization's operation, success and survival.
- IT supported Strategic system help the organization to get it's predetermined organizational goal, to increase market share, to negotiate with supplier and to stay in competition.
2. Customer focus and services:
- Customer focused approach refer to paying attention to customer preferences.
- Mass customization: Company produces a huge quantity of items as per desire of customers.
- IT supports mass customization.
3. Continuous Improvement Efforts:
- IT refers to the improvement of the productivity and quality of the products.
- Productivity is the ratio of outputs to inputs. Company can inprove the productivity by increasing outputs, reducing costs. or combination of both.
- IT is used for both productivity and quality improvement.
The approaches are:
a. JIT (Just in Time)
- It is an inventory apporach or attempt to reduce costs and improve workflow by scheduling the materials and parts to arrive at the workstation exactly when needed.
- JIT minimizes waste and saves inventory space and cost by minimizing in process inventories.
- IT makes it easy to implement complex JIT system.
b. TQM (Total Quality Management)
- It is a widely used organizational improvement tool or organized effort to improve Quality whenever and wherever possible.
- It places quality as the prime objective for organization and guarentees that all the things in organization are running as per plan.
- It promotes customer satisfaction and help the organization run smoothly.
- Information Technology can enhance TQM by enhancing Data monitoring, collection, analysis and reporting and also helps to remove the quality based problems before they arises.
4. Business Process Reengineering (BPR):
- New approach to overcome the limitation from the Continuous Improvement efforts in the environment full of business pressures.
- It includes change in management realignment, merges, consolidations, operation integration, disintegration practices.
The role of IT in BPR are:
- IT allows business to be conducted in different locations.
- IT provides flexibility in manufacturing.
- IT permits quick delivery to the customers.
- IT allows rapid transactions.
- IT helps increasing productivity and competitiveness.
5. Team- Base Structures:
- It helps to complete a specific job by collaboration of members of organization being focused on a specific job or project.
6. Business Alliance:
As per the Business pressures, many film is realizing that alliances with other films even their competitors is beneficial.
- Business alliances links manufactures, suppliers, and finance corporations supported by IT.
a. Supply Chain Management(SCM):
A practice that closely examines every steps involved in supplying a manufacturing film.
- SCM is the management of flow of goods and services which involve movement and storage of raw materials.
- The purpose of SCM is managing movement of raw material inside organization and movement of finished goods and services outside organization towards end users.
- SCM helps to improve trust and collaboration among supply chain partners by emphasizing communication and coordination among various partner involved.
B. Enterprise Resource Planning (EPR):
A practice that focuses on coordinating all the materials, production and management of resources within an organization. It is the integrated management of core business processes.
- EPR system are very sophisticated information System extended to all parts of organization.
- EPR tracks business resources like cash, raw materials, production capacity.
- EPR tracks status of business process like purchase, order and payrolls.
Functions of EPR:
- Fiance and Accounting: General ledger, payables, receivables, Cash management etc.
- Management of accounting: Budgeting, costing, cost management.
- Human resources: Recruiting, training, benefits, wages, plans and retirement management.
- Manufacturing: engineering, work orders, scheduling, workflow management, quality control.
- Order processing
- Project management
7. E-Commerce
The technology involving the development, maintenance, and use of computer systems, retrieving, transmitting and manipulating data and information is called Information Technology.
IT is the collection of individual technology components that are typically organized into CBIS(Computer Based Information System).
IT in Business Environment:
Business environment refers to combination of social, legal, economical, physical and political factors that affects the business activities.
Organizations must react to the problems and opportunities arising from the modern business environment. For that Information Technology is the only solution.
source: pexels.com
What are the Business Pressures?The list of business pressures in modern business organizations are listed as:
1. Global competition for trade and labor:
In a global economy, trade is less constrained by traditional barriers like borders, language, currency and politics etc. Advanced telecommunication network and Internet have facilitated the Globalization and creation of Global Economy.
- Cost of labor differ from one country to other. For example: Hourly industrial wage rate is more than 15$ in some western developed countries whereas it is only $1 to $2 in many developing countries.
- In addition companies in developed countries pay high costs and benefits. Therefore they have difficulties competing in labor-intensive industries with developing countries. As a result companies are moving their manufacture facilities to countries with low labor costs.
Such global strategy requires extensive communications, several cultural, ethical and legal conditions.
Rapid and inexpensive communication and transportation modes increases the magnitude of international trade even further.
2. Need for real time operation:
- Real time operation is the ability of organization to respond instantaneously to any business data and information for decision making.
- So high performance telecommunication and IT is needed.
3. Changing Workforce:
Workforce refers to the people engaged in or available for works, jobs, either in a country or an area or in a particular company.
- Participation of females, single parents, minorities and physically challenged persons in different works.
- Changing workforce can affect the organization's competence and profit from the production.
4. Customer orientation:
- Growth of knowledge in customers about availability and quality of products and services.
- Customers are comparing the products or services and demanding more detailed information about the products or services. So Customer Orientation is a must.
- Increase in customer sophistication and expectations.
- Advance in use of Internet and E-commerce bring customer information about products and services provided by the organization.
5. Technological Innovation and Obsolescence:
- Technological Innovation refers to increase in the quality and standard of the products and services which is causing obsolescence of the old products and services.
6. Information Overload:
- Information Overload is increasing day by day in an organization due to the use of the internet and other telecommunication networks.
- Information generated and stored in organization is increasing explonentially
- So accessing, navigating and managing the information for managerial decision making is critical.
7. Social Responsibilities:
- Social issues affecting organization ranges from state of physical environment to non discriminatory employment practices
- organizations are feeling pressure of social issues as public are becoming more aware of social problems.
8. Ethical issues:
Ethics in a business context refers to the standard and values for judging whether the particular conduct or act in work place is right or wrong.
- Ethical issues is important because it can damage image of the organization and confidence and morale of the employee.
- What is ethical to one person may not seem so to other and what is ethical in one country may not seem so to other country.
- Use of IT is raising many ethical issues ranging from surveillance of E-mail to invasion of privacy of millions of customers.
Organizational response to pressures:
Many of the organizational responses are enhanced or facilitated by IT:
1. Strategic System:
- Systems that help the organization's operation, success and survival.
- IT supported Strategic system help the organization to get it's predetermined organizational goal, to increase market share, to negotiate with supplier and to stay in competition.
2. Customer focus and services:
- Customer focused approach refer to paying attention to customer preferences.
- Mass customization: Company produces a huge quantity of items as per desire of customers.
- IT supports mass customization.
3. Continuous Improvement Efforts:
- IT refers to the improvement of the productivity and quality of the products.
- Productivity is the ratio of outputs to inputs. Company can inprove the productivity by increasing outputs, reducing costs. or combination of both.
- IT is used for both productivity and quality improvement.
The approaches are:
a. JIT (Just in Time)
- It is an inventory apporach or attempt to reduce costs and improve workflow by scheduling the materials and parts to arrive at the workstation exactly when needed.
- JIT minimizes waste and saves inventory space and cost by minimizing in process inventories.
- IT makes it easy to implement complex JIT system.
b. TQM (Total Quality Management)
- It is a widely used organizational improvement tool or organized effort to improve Quality whenever and wherever possible.
- It places quality as the prime objective for organization and guarentees that all the things in organization are running as per plan.
- It promotes customer satisfaction and help the organization run smoothly.
- Information Technology can enhance TQM by enhancing Data monitoring, collection, analysis and reporting and also helps to remove the quality based problems before they arises.
4. Business Process Reengineering (BPR):
- New approach to overcome the limitation from the Continuous Improvement efforts in the environment full of business pressures.
- It includes change in management realignment, merges, consolidations, operation integration, disintegration practices.
The role of IT in BPR are:
- IT allows business to be conducted in different locations.
- IT provides flexibility in manufacturing.
- IT permits quick delivery to the customers.
- IT allows rapid transactions.
- IT helps increasing productivity and competitiveness.
5. Team- Base Structures:
- It helps to complete a specific job by collaboration of members of organization being focused on a specific job or project.
6. Business Alliance:
As per the Business pressures, many film is realizing that alliances with other films even their competitors is beneficial.
- Business alliances links manufactures, suppliers, and finance corporations supported by IT.
a. Supply Chain Management(SCM):
A practice that closely examines every steps involved in supplying a manufacturing film.
- SCM is the management of flow of goods and services which involve movement and storage of raw materials.
- The purpose of SCM is managing movement of raw material inside organization and movement of finished goods and services outside organization towards end users.
- SCM helps to improve trust and collaboration among supply chain partners by emphasizing communication and coordination among various partner involved.
B. Enterprise Resource Planning (EPR):
A practice that focuses on coordinating all the materials, production and management of resources within an organization. It is the integrated management of core business processes.
- EPR system are very sophisticated information System extended to all parts of organization.
- EPR tracks business resources like cash, raw materials, production capacity.
- EPR tracks status of business process like purchase, order and payrolls.
Functions of EPR:
- Fiance and Accounting: General ledger, payables, receivables, Cash management etc.
- Management of accounting: Budgeting, costing, cost management.
- Human resources: Recruiting, training, benefits, wages, plans and retirement management.
- Manufacturing: engineering, work orders, scheduling, workflow management, quality control.
- Order processing
- Project management
7. E-Commerce
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